Northern Oil and Gas(NOG) - 2024 Q4 - Annual Report

Production and Sales - Net oil production increased to 26,511 MBbl in 2024, up 20% from 22,013 MBbl in 2023, while natural gas production rose to 113,476 MMcf, a 34% increase from 84,342 MMcf[275]. - In 2024, the company reported net production of 26,511 MBbl of oil and 113,476 MMcf of natural gas, representing a 20.5% increase in oil production and a 34.6% increase in natural gas production compared to 2023[332][334]. - Total revenues for 2024 were $2,225.7 million, a slight increase of 2.7$2,166.3 million in 2023, driven by a 13% increase in oil, natural gas, and NGL sales[332][334]. - Oil accounted for 88% and 87% of total oil and gas sales in 2024 and 2023, respectively, indicating a strong reliance on oil prices for cash flow stability[352]. Prices and Expenses - Average sales price for oil decreased to $71.59 per Bbl in 2024 from$74.78 per Bbl in 2023, while natural gas prices fell to $2.24 per Mcf from$2.98 per Mcf[275]. - The average realized price per Boe in 2024 was $49.21, down 9.3$54.22 in 2023, primarily due to lower average NYMEX oil and natural gas prices[338]. - Total production expenses per Boe were $9.46 in 2024, slightly down from$9.62 in 2023[275]. - Production expenses increased by 24% to $429.8 million in 2024, but on a per Boe basis, they decreased by 2$9.46[340]. - The depletion expense for oil and natural gas properties was $736.6 million in 2024, up from$482.3 million in 2023, with a per Boe depletion expense of $16.22[290]. Capital Expenditures and Financing - Total capital expenditures for 2024 were$1.7 billion, down from $1.9 billion in 2023, with drilling and development expenditures at$771.3 million[361]. - The company plans to budget approximately $1.05 billion to$1.20 billion in total planned capital expenditures for 2025[371]. - Net cash provided by financing activities decreased to $266.8 million in 2024 from$684.7 million in 2023, primarily due to increased borrowings and repayments under the Revolving Credit Facility[364]. - As of December 31, 2024, total debt was $2.39 billion, including$690 million under the Revolving Credit Facility and $1.7 billion in various senior notes[350]. - The company expects to fund planned capital expenditures through cash generated from operations and, if necessary, borrowings under the Revolving Credit Facility[371]. Shareholder Activities - The company repurchased 2,535,391 shares of common stock for$95.4 million in 2024, averaging $37.27 per share[349]. - The company repurchased 2,535,391 shares of common stock at a total cost of$95.4 million during the year ended December 31, 2024[372]. Risk Management - The company has entered into derivatives contracts to hedge commodity price risk on a portion of future expected oil and natural gas production[329]. - The company hedged approximately 73% of crude oil production and 63% of natural gas production in 2024, compared to 65% and 64% in 2023, respectively[352]. - The company uses derivative instruments to manage market risks from fluctuations in oil and natural gas prices, with various contracts in place for 2025 and 2026[388][397][399]. - As of December 31, 2024, the company had open crude oil derivative contracts totaling 12,776 MBbls for 2025, with a weighted average price of approximately $73.75 per Bbl[397]. - The company had open natural gas derivative contracts totaling 16,410,000 MMBTU for 2025, with a weighted average price of approximately$3.52 per MMBTU[399]. Financial Performance - Interest expense rose to $157.7 million in 2024, up from$135.7 million in 2023, primarily due to increased debt levels for acquisition activities[345]. - Income tax expense for 2024 was $160.5 million, with an effective tax rate of 23.6$1.4 billion in 2024 from $1.2 billion in 2023, driven by higher production volumes[360]. - Working capital deficit increased to$43.5 million in 2024 from a surplus of $123.6 million in 2023, with current liabilities rising by$158.5 million[356]. Reserves and Assets - The company holds approximately 292,500 net acres in the U.S., with 84% of total acreage developed as of December 31, 2024[281]. - Approximately 27% of the company's proved oil and gas reserve volumes are categorized as proved undeveloped reserves[380]. - The present value of future net cash flows from proved oil and natural gas reserves is subject to fluctuations based on oil and gas prices, which can significantly impact the company's financial condition[393]. - The company’s estimates of proved reserves quantities were prepared in accordance with SEC rules, audited by independent reserve engineers[382]. Interest Rate Management - The company’s long-term debt as of December 31, 2024, included both fixed and floating interest rates, with the Revolving Credit Facility having a floating rate[402]. - The company may use interest rate swaps to convert a portion of its variable rate indebtedness to fixed rate indebtedness[403]. - A 1% increase in short-term interest rates on the floating-rate debt outstanding as of December 31, 2024, would result in approximately $6.9 million in additional annual interest expense[405].